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The business case for inclusive growth Deloitte Global inclusive growth survey
January 2018 Inaugural edition
The business case for inclusive growth | Table of contents
01
Table of contents
Table of contents 1
Letter from the Deloitte Global Chairman 3
Introduction 4
The executive dilemma 6
Who is accountable? 8
Preparing for the future of work 10
Conclusion 13
About the survey 14
02
“Today, businesses are
measured and evaluated
by more than just financial
and economic indicators.
Executives are acutely
aware that enduring
success is tied to a
commitment to inclusive
growth and development.”
David Cruickshank
Deloitte Global Chairman
The business case for inclusive growth | Letter from the Deloitte Global Chairman
03
Letter from the Deloitte
Global Chairman
Today, businesses are increasingly driven by a sense of purpose to promote more socially inclusive growth and ultimately create greater opportunities for all people. This stems from calls for more inclusive thinking from people across
organizations including the board, executives and customers. The influence of
the millennial generation in the workplace has also been a significant factor. The idea that businesses can operate in siloes with little input or influence over societal issues is now becoming outdated. This purpose-driven focus is redefining the active role businesses should play in a globalized world. This sense of purpose is further underpinned by the belief that greater equality
can strengthen economic growth, and that business is an essential part of creating economic opportunities that can reduce inequality. It is also driven by the fact that consumers and clients are watching these issues – and care deeply about them. With all of these considerations in mind, Deloitte Global embarked on a new initiative to examine executives’ attitudes on the importance of achieving
inclusive growth. Working with Forbes Insights, we surveyed 350 C-Suite and
VP level executives globally across a range of sectors, from 10 November to 5 December 2017. The Deloitte Global inclusive growth survey also explores the ways businesses around the world are bringing inclusive growth initiatives to fruition.
The results show that while a focus on creating opportunities for all appears to be increasingly important to top executives, they feel limited when trying to achieve tangible inclusive growth outcomes. Perhaps this shouldn’t be surprising. We know it’s not a new phenomenon that executives are constantly under pressure to deliver short-term financial outcomes, which sometimes means weighing what is “good” against what is profitable. Today those pressures are heightened. In addition to adapting to the rapid technological
change that characterizes the Fourth Industrial Revolution, executives must make long-term strategic decisions about how to drive greater inclusivity in this
new environment. I am optimistic though. There is significant opportunity for top executives and every business professional to make a positive, measurable—and sustained—societal impact. However, advancing inclusive growth initiatives will require
leaders across all sectors to collaborate and bring their expertise to the table. I look forward to further exploring how our efforts as individuals and business leaders can be leveraged across industries and geographies to harness the opportunities of our current business environment—for all.
David Cruickshank
Deloitte Global Chairman
David Cruickshank Deloitte Global Chairman
The business case for inclusive growth | Introduction
04
Introduction
A more connected society, driven by rapid technological change and an
increasingly purpose-driven agenda, has positioned global executives to think
more holistically about the impact of economic growth. As we have seen,
economic growth and the advances of globalization do not directly correlate to
the improvement of all people’s lives. This recognition is driving an increasing
focus on inclusive growth—ensuring an equality of opportunity for all.
Recognizing that business cannot succeed if society fails, businesses are
increasingly broadening their strategic focuses on financial and nonfinancial
measures of success, including societal impact.
The executives in the Deloitte Global inclusive growth survey confirmed this
observation. Sixty-five percent ranked progress toward inclusive
growth/sustainability among their most concerning issues. In contrast, only 22
percent listed shareholder value as a top concern. Interestingly, inclusive
growth emerged as a bigger concern than crucial issues, such as customer trust
or talent management and retention, further highlighting how the executive
mindset is shifting to include societal impact as a factor of business success.
Only the concern about keeping up with technology and competitiveness (77%)
ranked higher than inclusive growth.
Most concerning issues in terms of business strategy (one of top three
issues)
77%
65%63%
41%
31%
22%
0
10
20
30
40
50
60
70
80
Keeping up with technology
competitiveness
Progress towards inclusive
growth/sustainability
Client/customer trust
Employee skill development
Employee hiring and retention
Shareholder value
Inclusive growth
emerged as a bigger
concern than crucial
issues, such as
customer trust or
talent management
and retention, further
highlighting how the
executive mindset is
shifting to include
societal impact as a
factor of business
success.
The business case for inclusive growth | Introduction
05
This renewed interest and awareness, however, does not necessarily translate
to action. While a vast majority of businesses surveyed—92 percent—publicly
support the UN’s 2030 Agenda and Sustainable Development Goals (SDGs),
only 17 percent believe the current programs and initiatives their businesses
have set in place will help to achieve the SDGs by 2030. Why is the success
rate expected to be so low, and how can we reinvigorate inclusive efforts to fuel
measurable impact?
A look ahead
Business and society are inextricably linked – one cannot thrive without the
other. Therefore, addressing the complex challenges society faces, both
globally and locally, is an urgent obligation for business – one that too often
goes unmet. The survey results further solidify what many believe to be true:
today’s business leaders want to understand the societal forces shaping our
world and impact them in a positive, meaningful way that contributes to the
advancement of the societies in which they live and work. In the same breath,
it’s not a surprise inclusive growth initiatives face the same internal pressures
that other organizational efforts face when it comes to creating tangible results.
As the old adage says, “what gets measured, gets done.” If the private sector is
to embrace the SDGs – to be guided by them and report their progress against
them – then the SDGs must be made measurable in an understandable way.
Currently, only a third of the 200+ indicators aligned with the SDGs can be
measured in a rigorous manner for a majority of countries. This has led to
independent initiatives to address this measurement challenge.
One such initiative is being spearheaded by the Social Progress Imperative, a
non-profit that Deloitte has collaborated with for the last four years to redefine
how the success of a society is measured. Their Social Progress Index uses 50+
societal and environmental outcome indicators drawn from official UN data as
well as from globally-respected research institutions and polling organizations
to provide a comprehensive, independent estimate of both national and SDG
performance. By capturing outcomes related to 16 of the 17 SDGs in a simple
but rigorous framework designed for aggregation, the Social Progress Index is
an invaluable proxy measure of SDG performance, particularly for areas where
official indicators do not yet exist.
“Deloitte is working to not only contribute to the
Sustainable Development Goals (SDGs), but ensure long-term success in building a society that is both
inclusive and sustainable. Any successful initiative needs to be measurable, and our survey shows that
executives are not certain about their ability to make a
truly measureable impact.”
David Cruickshank, Deloitte Global Chairman
Supporting the
SDGs
Businesses are increasingly
interested in supporting
the SDGs. However, as the
survey indicated, a
majority of businesses do
not believe that the current
programs and initiatives
they have set in place will
help to achieve the SDGs
by 2030
“Uncharted Waters:
Blending Value and
Values for Social Impact
through the SDGs”— a
joint collaboration between
UNDP, the Istanbul
International Center for
Private Sector in
Development, Business Call
to Action, and Deloitte
US—is intended to help
private sector leaders
pursue inclusive business
in order to realize progress
toward the SDGs.
The business case for inclusive growth | The executive dilemma: Barriers to making an impact
06
The executive dilemma:
Barriers to making an
impact
Our survey indicates that while executives are
enthusiastic about inclusive growth, they are
concerned with their current ability to make a
valuable impact. There are two major reasons
fueling executive doubt.
First, pursuing inclusive growth initiatives is seen as both a benefit for
businesses and as a detriment to achieving short-term goals; a “one-size-fits-
all” approach to inclusive growth initiatives simply is not possible for all
businesses. This creates a challenging environment, as executives must weigh
the costs and benefits of pursuing inclusive growth initiatives and the unique
factors affecting their industry and enterprise.
On the positive side, survey respondents believe that investing in inclusive
growth initiatives improves relationships with governments and regulators.
Executives also believe that these investments have contributed positively to
creating learning environments and creativity. As part of the future of work,
governments, corporations, and academia will need to prepare for a lifetime of
learning and reskilling citizens and employees.
Yet while inclusive growth initiatives are facilitating businesses growth and
inspiring business culture, they are also viewed as a limiting factor. As
businesses make investments in inclusive growth initiatives, executives feel
pressure in other areas. According to our survey, support for inclusive growth
initiatives is impairing decision making around investments and the workforce.
The business case for inclusive growth | The executive dilemma: Barriers to making an impact
07
What is the effect of the support for inclusive growth on your business?
(top three)
Even executives who would like to champion inclusive growth initiatives face
significant headwinds. External factors, including “short-termism” and
shareholder expectations (33%) are at the top of the list, followed closely by
government mandates and the regulatory environment (31%).
Internal factors such as executives’ clarity about how to address inclusive
growth (30%), and executives’ belief in their business’s ability to influence
change (30%) also make supporting inclusive growth challenging. Yet, in a
positive sense, these concerns can provide global executives with a tangible
understanding of the factors that are in their control as they try to overcome
roadblocks in promoting a more equal, more socially responsible business.
Which of the following factors have the most impact on your ability to
support inclusive growth?
The business case for inclusive growth | Who is accountable? Building an inclusive growth culture
08
A look ahead
Today, businesses are measured and evaluated by more than just financial and
economic indicators. Many executives understand that having a purpose-driven
agenda not only improves returns, but also helps restore public trust in
business and, most importantly, adds value to society. Businesses need to hit
the “reset button” and evaluate how they can support inclusive growth
initiatives despite other obligations and demands—including short-term
expectations—that make it hard to prioritize these important efforts.
Who is accountable?
Building an inclusive
growth culture
Our survey showcases that inclusive growth is top
of mind for executives and businesses, but there
are still significant barriers to implementing
inclusive growth initiatives and uncertainty as to
who should be leading them.
In your opinion, what is the level of responsibility the following
stakeholders feel towards achieving inclusive growth?
A majority of executives surveyed consider inclusive growth to be a collective,
rather than personal, responsibility. Less than half (45%) feel personally
responsible, though they believe that the responsibility falls to their business
leaders (75%). This is reassuring, as the whole organization needs to drive
The business case for inclusive growth | Who is accountable? Building an inclusive growth culture
09
inclusive growth initiatives rather than one individual or department. However,
it is still concerning that that same level of responsibility does not permeate to
other executive levels. If no one feels responsible, who is taking the lead?
Currently, inclusive growth is most often driven by the constituency that is
tasked with social initiatives—the Corporate Social Responsibility (CSR) function
(43%)—followed by the constituencies that wield the most power—top
leadership (39%) and the CEO (30%). This breakdown highlights that although
the issue has reached the C-suite, it also risks being siloed as a purely CSR-
driven initiative and not a business wide priority.
Surprisingly, millennials, who are often seen as a voice behind sustainability
initiatives, are the least likely to drive them. This is particularly interesting, as
Deloitte’s 2017 Millennial Survey found that globally, millennials feel
accountable, at least to a fair degree, for many issues in the workplace and the
wider world. While they feel they can wield more influence over their peers,
customers, and suppliers than on leaders or “big issues,” the millennial survey
found that they are still reliant on their older, more senior leaders to create real
change – or, perhaps, simply less informed about their ability to enact social
change when faced with other business priorities.
Against this backdrop, it is troubling that inclusive growth initiatives are not
more prominent throughout businesses, especially as previous research has
told us that millennials feel the most empowered to enact change in the
workplace.
Which of the following roles are driving inclusive growth in your
organization?
The business case for inclusive growth | Preparing for the future of work: Impact on inclusive
growth
10
Inclusive growth initiatives need to be embedded in businesses’ strategic
priorities, with champions held accountable for moving them forward. This
should include identifying opportunities to empower others to become active in
the inclusive growth space and create room for all professionals to take an
active hand in driving these initiatives.
A look ahead
Our survey reconfirms that supporting inclusive growth initiatives cannot be left
to a single individual – all members of an organization need to feel accountable
and empowered to lead and partake in inclusive growth efforts.
Leadership must also take a more active role in prioritizing inclusive growth
initiatives and raising their visibility. The c-suite and board of directors can be a
driving force to ensure everyone has a seat at the table and feels involved in
fueling progress.
Previous Deloitte Global studies have shown us that millennials care about
matters of social reform and inclusive growth. Yet, the lack of involvement from
this critical demographic shows that we need to listen to and leverage them
more to bring about meaningful societal impact. Creating programs or
initiatives that empower millennials to use their unique skills and work towards
achieving inclusive growth will help drive change at all levels.
Preparing for the future
of work: Impact on
inclusive growth
The Fourth Industrial Revolution is bringing with it rapid changes to the nature
of work and the workforce. It is changing the way businesses approach learning
and skills development within their organizations. These new strategies have
the opportunity to influence the success of inclusive growth initiatives
significantly, but leave questions as to who is responsible for the larger societal
impact of technological and enterprise change as well as addressing the
broader societal issues like wage disparity.
Business response to a changing workforce
In order to realize progress towards inclusive growth, addressing talent issues
around the future of work is critical, including challenges posed by the growing
skills gap and wage disparity. Executives surveyed, though, differ in their paths
forward.
Inclusive growth initiatives cannot be left
to any single individual -
all members of an organization need to feel
accountable and empowered to lead and
partake in inclusive
growth efforts.
The business case for inclusive growth | Preparing for the future of work: Impact on inclusive
growth
11
What is the best way to ensure that businesses will have talent in
place?
Currently, businesses are leveraging a number of tools to build the workforce of
the future, including providing opportunities to potential employees through
apprenticeships and mentoring programs, and creating a culture of lifelong
learning. These types of tools have an impact beyond just a business’s talent
management strategy, and can positively offer their employees and
communities greater inclusion in wage and economic growth.
Although these efforts will go a long way in developing the workforce of the
near future, there remains gaps in prepping today’s young students for the
more distant future of work – and much of that future remains shrouded in
mystery. Only 12 percent of executives believe that their businesses will
collaborate with government to ensure schools are preparing students
appropriately for the future. This gap is one that needs to be addressed
because it can have a measurable impact on future business talent needs and
address future disparities that will be created by those with and without the
necessary skillsets to succeed.
Beyond just business’s focus on its own talent needs, there is also a gap in how
business views the wider impact of the Fourth Industrial Revolution. Sixty-one
percent believe that the impact of technology on the workforce will require new
social solutions, but executives and business strategists often do not address
what those solutions are and business’s role in achieving them.
The business case for inclusive growth |
12
Looking ahead
As the future of work evolves rapidly around us, businesses are working to
harness new technologies and effectively lead and engage the new workforce.
We can—and need to—apply these same cutting-edge innovation capabilities to
transform learning and enable educators and business to better prepare for the
future. This will not only have a positive impact on businesses, but also the
wider societies in which they operate by creating opportunities for talent across
regions and backgrounds.
Education and skills development are some of the most important tools that
can be used to reduce inequality and achieve inclusive growth. Businesses, in
collaboration with education systems, need to invest in delivering lifelong
education and skills development that do not end once people enter the
workforce. By breaking down these barriers, businesses can increase
employment inclusivity and make progress toward inclusive growth and
addressing social mobility.
Deloitte Middle East’s Digital Youth Program
WorldClass Preparing fifty million futures
for a world of opportunity
At Deloitte, we have
developed WorldClass, an
organization-wide initiative
to impact 50 million futures
that aligns Deloitte’s local
efforts around a global
ambition.
Deloitte is committing its
most valued asset—its more
than 250,000 professionals
around the globe—to
creating opportunities for
those left behind. By
collaborating with
businesses, government, and
educators, together we can
transform learning and
enable individuals to access
the skills they really need to
meet future job demands.
In FY17, Deloitte member
firms invested US$200
million globally in societal
impact programs. Of that,
over US$65 million was
aligned to education and
skills, including more than
410,000 hours of Deloitte
professionals’ time.
The business case for inclusive growth | Conclusion
13
Conclusion
The inaugural Deloitte Global inclusive growth survey suggests that although
significant challenges remain, business leaders are enthusiastic about the
business case for inclusive growth. They recognize that businesses that focus
on creating opportunity for all, including their employees and their
communities, perform better than those who only focus on financial success
and short-term results.
With a majority of businesses surveyed publicly committed to the 2030 Agenda
and Sustainable Developments Goals (SDGs), there are encouraging signs that
inclusive growth initiatives will remain a key issue on the minds of executives.
In the year ahead, business leaders have a significant opportunity to explore
new ways to bring inclusive growth initiatives to fruition and make progress
towards the SDGs.
This series of surveys will continue to shed light on where future opportunities
exist—and where challenges remain—as executives lead their organizations into
2018 and beyond.
The business case for inclusive growth | About the survey
14
About the survey
Methodology
Forbes Insights surveyed 350 senior executives globally across a range of
sectors, from 10 November 2017 to 5 December 2017. Seventy percent of
respondents are C-Suite executives, while the remainder are VP level and
above. Forty-three percent of the executives surveyed are from the Americas,
40% are from EMEA, and 17% are from APAC. All executives are from
organizations with a minimum of $1 billion in annual revenue, with 46% coming
from organizations with $5 billion or more.
About Forbes Insights
Forbes Insights is the strategic research and thought leadership practice of
Forbes Media. By leveraging proprietary databases of senior-level executives in
the Forbes community, Forbes Insights conducts research on a wide range of
topics to position brands as thought leaders and drive stakeholder engagement.
The business case for inclusive growth |
15
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